Sukanya Samriddhi Account has been introduced to ensure that the girl child is not left behind. The scheme aims to provide financial security to a girl till the time that she gets married. The Sukanya Samriddhi Account scheme is meant for girl children below the age of 10 years. The account matures in 21 years before which it is in a lock-in period where funds cannot be withdrawn.
Sukanya Samriddhi Yojana is a new scheme launched in the year 2014 by Prime Minister Narendra Modi. The Sukanya Samriddhi Account scheme was launched with an initial interest rate of 9.10% p.a. for the year 2017-2018. This has been increased to 9.20% p.a. for the current fiscal 2015-16.Sukanya Samriddhi Yojana interest rate is revised on a yearly basis and hence for FY 2016-17 it has been revised 8.6%.
On 23 July 2018, the criteria for minimum annual deposit for the Sukanya Samriddhi Yojana account has been revised to Rs.250 from the earlier amount of Rs.1,000. Also the interest rate for the July-September quarter is 8.1%.
Salient Features of Sukanya Samriddhi Account
- Flexible deposit amounts: The account can be opened with a minimum deposit of Rs.250 and in multiples of Rs.100 thereafter. A maximum of Rs.1.5 lakhs can be deposited per account every year.
- Tax exemption: Depositors stand to receive exemptions up to Rs.1.5 lakhs p.a. as per Section 80C of the Income Tax Act, 1961.
- Partial withdrawal: Partial withdrawal of up to 50% of account balance can be claimed once the account holder turns 18, allowing her to pursue higher education on her own.
- Documentation: Minimal documentation requirement which includes birth certificate of girl child and identity and address proof of depositor.
- Transferability: The account can be transferred to any of the bank branches across India that accept Sukanya Samriddhi Account openings. The RBI has listed 28 banks apart from post office branches which can operate Sukanya Samriddhi Accounts.
Sukanya Samriddhi Account Interest Rate
Based on the Government Security (G-sec) yields, the Indian Government decides the rate of interest for the scheme on a quarterly basis. The interest rate is compounded on a yearly basis and is credited to the account. Subscribers can also opt for monthly interest. For a month, the rate of interest is calculated on the minimum balance that is present in the account between the end of the 10th and the last day of the month. For the fourth quarter of the FY2018-2019, the rate of interest is 8.5%.
|Sl. No||Year||Interest Rate (%)|
|1||1 January 2019 – 31 March 2019||8.5|
|2||1 October 2018 – 31 December 2018||8.5|
|3||1 July 2018 – 30 September 2018||8.1|
|4||1 April 2018 – 30 June 2018||8.1|
|5||1 January 2018 – 31 March 2018||8.1|
|6||1 July 2017 – 31 December 2017||8.3|
|7||1 October 2016 – 31 December 2016||8.5|
|8||1 July 2016 – 30 September 2016||8.6|
|9||1 April 2016 – 30 June 2016||8.6|
|10||From 1 April 2015||9.2|
|11||From 1 April 2014||9.1|
The Government has ensured that the Sukanya Samriddhi Account Interest rate is lucrative enough for parents to be encouraged to invest more for the future security of the girl child. The interest rate for the financial year 2018-2019 is 8.1%. The interest rate pertaining to the current financial year 2017-18 is 8.4%, and it is compounded on an annual basis. This is also the best interest rate among other savings schemes, including PPF.
Effectively, the parent gets a competitive interest rate on the Sukanya Samriddhi Yojana Account, in addition to a tax exemption under Section 80C of the Income Tax Act, 1961. There is no other deposit scheme in the country that offers such a high rate of interest, tax exemption, and security for the girl child.
The SSA interest rate change chart is as shown below:
|S.No||Financial Year||Assessment Year||Interest Rate||Minimum Amount Limit (Rs.)||Maximum Amount Limit (Rs.)|
|1||Q3 of 2017-18||Q3 of 2018-19||8.1||Rs.250||Rs.1.5 lakh|
|2||Q2 of 2017-18||Q2 of 2018-19||8.1||Rs.1,000||Rs.1.5 lakh|
|3||Q1 of 2017-18||Q1 of 2018-19||8.1||Rs.1,000||Rs.1.5 lakh|
|4||Q4 of 2016-17||Q4 of 2017-18||8.4||Rs.1000||Rs.1.5 lakh|
|5||Q3 of 2016-17||Q3 of 2017-18||8.5||Rs.1000||Rs.1.5 lakh|
|6||Q2 of 2016-17||Q2 of 2017-18||8.6||Rs.1000||Rs.1.5 lakh|
|7||Q1 of 2016-17||Q1 of 2017-18||8.6||Rs.1000||Rs.1.5 lakh|
The comparison of Sukanya Samriddhi interest rate with other popular savings instruments such as PPF, RD and FD is shown below:
|Scheme||Sukanya Samriddhi Yojana||Public Provident Fund (PPF)||Fixed Deposit||Recurring Deposit|
|Interest rate (Fy: 2017-18)||8.1% p.a.||7.6% p.a.||6.4 - 6.75% p.a.||6.4 - 7.25% p.a.|
Benefits of Sukanya Samriddhi Account
Apart from the higher interest rates, some of the other Sukanya Samriddhi scheme Benefits are as follows:
- Sukanya Samriddhi Account Tax benefits under section 80C.
- The account can be transferred anywhere in India.
- The minimum amount that needs to be deposited on an annual basis is very low, i.e., Rs.250 per year.
- The girl child will be able to operate the account after the attainment of 10 years.
- The girl child will receive the proceeds when the account matures.
The SSA is unique in the fact that it is a scheme that offers financial security and growth, in addition to creating an awareness on the well-being of the girl child.
Documents required to Open the Account
The application process for the Sukanya Samriddhi scheme is very simple and requires the parents of the child to submit certain documents, such as:
- Account Opening Form
- Birth Certificate of the child
- Address and proof of identity of the legal guardian
The amount that the child receives on maturity of the policy is totally tax-free. There will also be no tax on the investments made towards the scheme.
Interest Rate Calculation for 9.2%
If you are the parent of a girl child who has decided to invest in this scheme, the maturity amount that you can avail when you start contributing from the financial year 2015-16 is as follows. The interest rate considered for this calculation is 9.2%.
|Investment amount each year for 14 years, starting from 2015 till 2028 (Rs.)||Maturity amount received after 21 years (Rs.)|
SIP Vs Sukanya Samriddhi Account
Since the investment period for a Systematic Investment Plan(SIP) and the Sukanya Samriddhi Account are long-term, there have been many a debate on which is the best investment channel to avail maximum benefits in the future.
SIP is a method of investing in the stock market through mutual funds on a regular scale, whereas, the investment in SSA is 100% debt-based. When you invest in the stock market for an extended period of time, i.e., more than 14 years, historical data reflects that the returns are huge. These returns not only tackle inflation, but also help your money grow. However, these investments are subject to market risks. In the case of a debt investment tool such as SSA, the interest rate is flexible; so in the long run, the returns may not be able to meet the inflation and tax. But the element of risk in a debt-based investment is very low. So, this channel of investment is ideal for individuals who are not willing to endure stock market risks.
- Is it possible to close the SSY account before maturity?
- Can a loan be availed on an SSY account?
- Can a girl child open more than one SSY account?
- Is the transfer of an SSY account from one bank to another possible?
- Are there any penalties if the subscriber fails to deposit money in SSY account?
- How long does it take for the SSY account to mature?
- Is the SSY scheme available throughout India?
No, it is not possible to close the SSY account before maturity.
No, loan facility on an SSY account is not available.
No, a girl child can have only SSY account under her name.
Transfer of an SSY from a bank to a post office and vice versa is possible.
A Rs.50 penalty is levied if the subscriber fails to deposit the minimum amount in a financial year.
An SSY account matures after 21 years from the date the account was started.
Yes, an SSY account can be opened anywhere in India.
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